INTRODUCTION
Nigeria’s power sector has long been characterized by structural deficiencies: weak infrastructure, rampant vandalism, heavy subsidies, regulatory ambiguity, and an inability of many distribution companies to recover costs. In response, a landmark reform occurred in 2023, when the Electricity Act was passed to align with the 5th Alteration of the Constitution, effectively devolving electricity powers to states while maintaining national oversight. However, the bold decentralisation agenda has already encountered practical and legal tensions, prompting the National Assembly to propose the Electricity Act Amendment Bill 2025. “The Bill” The new Bill seeks to amend the 2023 Act to close perceived gaps, strengthen enforcement, and clarify jurisdictional boundaries. This article examines Key new provisions and innovations in the 2025 Bill, compares them with the existing framework (including the 2023 Act and the 2024 Amendment Act), and briefly discusses the likely impacts of these changes.
BACKGROUND: THE 2023 ACT AND THE 2024 CHANGES
The enactment of the Electricity Act 2023 (the “Act”), following the Fifth Alteration of the Constitution of the Federal Republic of Nigeria, marked a major shift toward decentralised power sector governance. The constitutional amendment removed the limitation that confined State Houses of Assembly to areas not served by the national grid, extending state authority over electricity activities within their territories. The Act enables states to enact electricity laws, establish State Electricity Regulatory Commissions, and, subject to statutory conditions, regulate intrastate generation, distribution, and retail supply, while interstate and national grid activities remain federally regulated.
In 2024, the Electricity Act Amendment (“EAA”) 2024 was signed into law on 9 February to refine the 2023 regime. It introduced host community development funds, established a Transmission System Operator, and strengthened the powers of the National Energy Regulator (“NER”), addressing operational gaps rather than overhauling the system. The 2025 Bill, sponsored by Senator Enyinnaya Abaribe of Abia South, proposes broader reforms in response to sector debt, vandalism, and friction between federal and state regulators.
KEY PROVISIONS IN THE ELECTRICITY AMENDMENT BILL 2025 (the “2025 AMENDMENT BILL”)
1. The scope of state powers versus national control
The Bill reaffirms that State Houses of Assembly can legislate on electricity matters within their territorial boundaries, including generation, transmission, system operations, distribution, supply, and retail activities. It also authorizes states to establish state electricity regulators and state electricity markets. However, the 2025 Amendment Bill introduces a proviso that no state law may conflict with the Bill or the principal Act in three core areas: regulation of the national grid system; operation of the national wholesale electricity market; and the setting and enforcement of technical standards, operational codes, consumer protection measures, competition rules, and climate obligations.
This amendment is of huge importance as it clarifies the extent of the States’ power regarding the country’s electricity market. The new Bill clarifies that any activity involving the national grid or the national wholesale market remains under the Nigerian Electricity Regulatory Commission and relevant national bodies. As a result, state autonomy is limited whenever a project or company connects to national assets or is subject to national technical and market codes.
2. Licensing, trading, and cross-border activity
The Bill revises several licensing provisions, including section 68 of the Electricity Act 2023. It confirms that a generation licence holder may sell electricity outside Nigeria, subject to full compliance with directions issued by the Nigerian Electricity Regulatory Commission pursuant to ministerial policy. It also amends the distribution framework to expressly regulate inter-state and cross-border distribution and introduces a new prohibition on trading licensees engaging in cross-border trading without prior authorisation from the Commission based on applicable policy directives. Taken together, these provisions consolidate inter-state and export activities within a single national gatekeeping framework.
3. The Power Consumer Assistance Fund
The Bill replaces the consumer assistance provisions entirely and establishes a more detailed Power Consumer Assistance Fund under Part XV of the Electricity Act 2023. The Fund supports vital social institutions and under-served or under-privileged consumers through targeted subsidies. It specifies funding sources, including National Assembly appropriations, defined consumer contributions determined by the Commission, and a portion of service charges from licensee tariffs. The Bill sets administrative cost caps, mandates a timetable for regulations defining eligibility, and prescribes due process for rate setting and disbursements. It also provides for a dedicated Secretariat, the appointment of external Fund Managers, and quarterly and annual reporting obligations. The earlier Act contemplated consumer subsidies but lacked a fully developed implementation framework. The new provisions move Nigeria toward a more targeted support regime with clearer eligibility criteria, verification mechanisms, and audit requirements.
4. Vandalism and asset protection
The Bill creates a standalone offence for the vandalism of electricity assets by inserting new sections 220A and 220B into section 220 of the Electricity Act 2023. It defines the scope of electricity infrastructure covered and establishes penalties that scale with the gravity of the offence, ranging from three years’ imprisonment to life imprisonment, together with forfeiture of tools and equipment and the imposition of compensation orders. While the 2023 Act recognises vandalism as a serious concern, it does not set out penalties in the Act. The new provisions therefore introduce a clear and sector-specific deterrent framework.
5. The Forum of Electricity Regulators and dispute pathways
The Bill establishes a Forum of Electricity Regulators comprising the Nigerian Electricity Regulatory Commission, the Chairs of State Electricity Regulatory Commissions or their equivalents, and the Chief Electrical Inspector. The Forum is mandated to harmonise standards and codes, coordinate interaction between the national wholesale market and state electricity markets, develop model instruments for consumer protection and host community engagement, publish reports on tariffs and market performance, and provide a platform for the resolution of disputes arising from overlapping jurisdictions or inter-state transactions. The Bill further provides that the Commission shall exercise final administrative appellate jurisdiction over specified matters, subject to judicial review by the appropriate High Court.
6. Industrial relations and minimum service levels
The Bill designates the generation, transmission, system operations, distribution, and supply of electricity as essential services across both the national wholesale market and state electricity markets. It restricts industrial action that would disrupt these services, subject to the implementation of minimum service agreements. The Bill further directs the Nigerian Electricity Regulatory Commission, in consultation with trade unions and employers, to issue regulations prescribing standard templates for minimum service agreements, defining minimum operational requirements during labour disputes, establishing grievance resolution pathways, and setting out sanctions for non-compliance.
7. Financing the sector and recapitalisation
The Bill directs the Federal Government, acting through the Minister and in consultation with the Commission, to establish a comprehensive framework for financing projects in the Nigerian Electricity Supply Industry (“NESI”) within twelve months . It outlines key elements of the framework, including the provision of long-term local currency capital for gas-to-power and distributed energy projects, a predictable and cost-reflective tariff trajectory, the concessioning of selected power plants, and a programme to complete the recapitalisation of successor distribution companies, including those under receivership. The Bill further empowers the Commission to require core investors to complete recapitalisation within twelve months and to sanction non-compliance through measures such as share dilution or reprivatisation, while safeguarding continuity of service and maintaining investor confidence.
8. Host community rights and obligations, and licensee duties
The Bill defines the term “host community” in the context of electricity generation, transmission, and distribution licencees. It grants host communities rights to information, consultation, local benefits, environmental protection, and access to grievance mechanisms. At the same time, it imposes obligations on host communities to cooperate with licensees, protect assets, avoid violence, and pay approved tariffs. Licensees are required to allocate a portion of annual operating expenditure, capped at five per cent or another approved amount, for community development.
9. Regulation of Intra-state electricity
The Bill states the Commission shall have regulatory oversight on intra-state operations that involve reliance on any part of the national grid system. This seems overreaching for the Commission, and it may stall the development of the decentralised market as contemplated by the Electricity Act, as most electricity transactions are done on the grid and setting up a State-owned grid is an expensive venture. However, States that are interested in attracting investment in their State can develop their off-grid market.
CONCLUSION
The Electricity Act Amendment Bill 2025 is an ambitious and contentious effort to recalibrate Nigeria’s decentralised power architecture. It introduces several powerful corrective tools, criminal sanctions, clearer transitional rules, more robust oversight, and revised consumer subsidy mechanisms. Yet many of its provisions tilt toward re-centralisation by reasserting NERC’s primacy over state regulators in grid-tied situations. The challenge for Nigeria’s legislature and stakeholders will be striking a balance: preserving the promise of state-level innovation, responsiveness, and local development, while ensuring unified national standards, grid stability, and legal certainty. The success of the Bill will turn on faithful implementation, cooperative federalism, and transparent rule-making that keeps investors engaged and puts consumers at the centre. If those conditions are met, this amendment could move the sector from repeated crises toward gradual stability.
Ozioma Agu is a Partner at Stren & Blan Partners and supervises the Firm’s Energy, Finance and Infrastructure Sector. Anjoreoluwa Boluwajoko, David Olajide and Eniola Alayo are Associates in the Firm’s Energy, Finance and Infrastructure Sector.
Stren & Blan Partners is a full-service commercial Law Firm that provides legal services to diverse local and international Clientele. The Business Counsel is a weekly column by Stren & Blan Partners that provides thought leadership insight on business and legal matters.
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